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Judge OKs Antitrust Against A 07/01 06:42
(AP) -- A federal judge on Monday rebuffed Apple's request to throw out a
U.S. government lawsuit alleging the technology trendsetter has built a maze of
illegal barriers to protect the iPhone from competition and fatten its profit
margins.
The 33-page opinion from U.S. District Judge Xavier Neals in New Jersey will
enable an antitrust lawsuit that the U.S. Justice Department filed against
Apple 15 months ago to proceed. Neals has set a timetable that could see the
case come to trial in 2027.
Apple has sought to dismiss the lawsuit, arguing the Justice Department had
distorted the contours of the smartphone market and made a series of other
misinterpretations that warranted the case be thrown out.
But Neals decided there is enough evidence to support the Justice
Department's market definitions and concluded the case's key allegations
merited further examination at trial.
The case seeks to pierce the digital fortress that Apple Inc., based in
Cupertino, California, has built around the iPhone, iPad and other products to
create a so-called "walled garden" allowing its hardware and software to mesh
seamlessly for users.
The Justice Department alleges that walled garden has mostly turned into a
shield against competition, creating market conditions that enable it to charge
higher prices and stifle innovation.
The lawsuit "sets forth several allegations of technological barricades that
constitute anticompetitive conduct," Neals wrote in his opinion. The judge also
concluded the Justice Department had pointed toward enough areas of troubling
conduct that raised the "dangerous possibility" that Apple has turned the
iPhone into an illegal monopoly.
In a Monday statement, Apple reiterated its position that the Justice
Department's case "is wrong on the facts and the law, and we will continue to
vigorously fight it in court."
The antitrust lawsuit isn't the only legal headache threatening to undercut
its profits, which totaled $94 billion on sales of $295 billion in its fiscal
year ending last September.
Another federal judge in April issued a civil contempt order banning Apple
from collecting any fees from in-app transactions on the iPhone that are
funneled through other options besides its once-exclusive payment processing
system that charged commissions ranging from 15% to 30%.
Apple also could lose a more than $20 billion annual payment that it gets
for making Google the default search tool on the iPhone and other products as
part of another antitrust case brought by the Justice Department. A federal
judge in Washington D.C. is considering whether to ban the deals with Apple as
part of a shake-up being proposed to address Google's illegal monopoly in
search.
Neals' decision to allow the Justice Department's antitrust case to proceed
came on the same day that Apple was hit with a lawsuit by app maker Proton
amplifying the accusations of wrongful conduct by the company. The lawsuit,
which will seek to be certified as a class action presenting thousands of
developers who have made iPhone apps, is asking for punitive damages against
Apple, as well as a court order to dismantle its walled garden.
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